New media fundraising:21st century innovationsCAF Research briefing paper
New media fundraising:                               121st century innovationsCAF Research briefing paperSally Clegg, Rese...
Foreword    Charitable giving in the UK has come a long way since it was formalised2   in the Elizabethan Poor Law of 1601...
Contents1	        Executive summary	                                        4	                                            ...
1 Executive summary               „„   the UK’s adoption of online fundraising generally echoes trends4                   ...
2 Introduction                                         ‘New media’ is defined as ‘developing, usually electronic forms of ...
3 Innovations: charities’ options and    	 experiences6                                              3.1 Online fundraisin...
has been reported as as high as 84% of those households with Internet                                           access 8)....
A research survey by CAF in February 2007 found that there is room in8                                               the s...
2,000 charities have signed up to eBay for charity to be eligible to receive                                           don...
sponsorship for the London Marathon since 2001, and its popularity10                                               among d...
$1000 Linden (~ £1.77) for the charity as well as highlighting the plight                                          of Tibe...
‘Mr Testicles’ character participating in sporting activites like skiing on12                                       YouTub...
The best example of spontaneous online giving on a grand scale is the                                          2004 Asian ...
over half of the online US donors indicated that they did not want to14                                              be co...
facility free of charge to US non-profit organisations until the end of                                            2008 53...
domain and redirected donors to a similar looking site to make their16                                               donat...
Table 1: Global Internet access rates                                                                                     ...
be allowed to add a surcharge for appeals. The BBC has introduced the18                                                pol...
sends a text to the charity, and is billed for a fixed value. The phone                                             operat...
a mobile phone that utilises Near Field Communication (a way to use one20                                               de...
A payment service similar to PayPal has been launched in the UK by the                                             Norwegi...
In addition, a major barrier to the growth of text donations is that it is22                                          diff...
3.3.1 Dedicated television channels                                                                                       ...
3.4 Coinstar machines24                                              Coinstar machines can be found in many UK supermarket...
Table 3: Donations made through HSBC ATMs                                                                                 ...
4 CAF interviews with charities                                                4.1 Stage 1: interviews with charities26   ...
New Media Fundraising
New Media Fundraising
New Media Fundraising
New Media Fundraising
New Media Fundraising
New Media Fundraising
New Media Fundraising
New Media Fundraising
New Media Fundraising
New Media Fundraising
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New Media Fundraising

  1. 1. New media fundraising:21st century innovationsCAF Research briefing paper
  2. 2. New media fundraising: 121st century innovationsCAF Research briefing paperSally Clegg, Research OfficerLiz Goodey, Head of ResearchWith special thanks to:Ian Mocroft, independent consultantSarah Hughes, Charity21Amy Leadbeater, Research and Development Executive
  3. 3. Foreword Charitable giving in the UK has come a long way since it was formalised2 in the Elizabethan Poor Law of 1601. The types of causes that donors are encouraged to give to, and the ways that charities fundraise have evolved greatly over the last 400 years, in an evolution characterised by great innovation and diversification. The sheer variety of ways of giving to charity make fundraising unrecognisable even from twenty years ago. Fundraising methods that fall under the umbrella of ‘new media’ – such as the Internet, digital television and mobile telephones – are developing at an incredible pace. With new electronic and web capabilities being invented and adapted for an interactive media-hungry public, fundraisers are constantly adapting their fundraising techniques to new technologies such as social networking and digital television. Over the past few years, CAF has been monitoring developments and innovations in the sphere of new media fundraising methods, and we hope that this briefing paper offers charity fundraisers and other researchers a solid overview of these methods, how they have been used, and what successes charities have achieved. Dr John Low Chief Executive CAF
  4. 4. Contents1 Executive summary 4 32 Introduction 5 3 Innovations: charities’ options and experiences 63.1 Online fundraising 63.1.1 Overall online giving levels 63.1.2 Charity websites 73.1.3 Online charity shops 83.1.4 Online sponsorship 93.1.5 Online communities 103.1.6 Search engines 113.1.7 Video-sharing sites 113.1.8 Targeted giving 123.1.9 Spontaneous giving 123.1.10 US comparisons 143.1.11 Risks and concerns 153.1.12 Scope for increasing online donations 163.2 Mobile phones and text donations 173.2.1 The scope for increasing potential for text donations 203.2.2 Barriers to the growth of text donations 213.3 Digital television 223.3.1 Dedicated television channels 233.3.2 Digital television applications 233.4 Coinstar machines 243.5 ATMs 243.6 Viral emails 25 4 CAF interviews with charities 264.1 Stage 1: interviews with charities 264.1.1 Findings 264.2 Stage 2: examination of charities’ websites 27 5 Discussion 30 6 Appendices 336.1 Primary research interview topic guide 336.2 Charities that helped with the primary research 34
  5. 5. 1 Executive summary „„ the UK’s adoption of online fundraising generally echoes trends4 witnessed in the US „„ the UK is ahead of the EU average in terms of household Internet and broadband access, giving scope for growth in online donations „„ charities and donors are making use of websites that help them raise money for charity, such as auction sites „„ for major sponsorship events, online donations are now vitally important, and are steadily increasing the share of the total money raised that they account for „„ the recent online communities and social networking phenomenon is being utilised by charities who are taking the opportunity to increase their online presence „„ digital television is likely to increase its role as a key fundraising and awareness-raising tool; charities have already been diversifying their income streams by receiving money via television programmes that donate a proportion of a text or calls to charitable causes „„ almost a third of charities are considering using text messaging for communication with their donors, and potential donors „„ in the UK, there are now more mobile phones than people, which provides a substantial pool of potential donors using mobile technology „„ small and medium-sized charities are considering using digital television as a way to reach donors in the future and the availability of information on the voluntary sector on television is soon to be boosted by a forthcoming new channel, which is due to launch in 2008 „„ donations at ATMs are now possible through HSBC machines worldwide, and are growing steadily; taking into account the number of ATMs in the UK, and the number of users, there is considerable scope for increasing donations through this method „„ of those UK charities with a website, currently one third can accept online donations „„ early experiences of online giving indicate that in order to retain donor confidence in online giving, charities must ensure that their websites are secure from fraud attempts
  6. 6. 2 Introduction ‘New media’ is defined as ‘developing, usually electronic forms of media regarded as being experimental’ 1. These are all media that charities can 5 exploit for fundraising purposes. Charities have used different methods, and have had varying degrees of success. This briefing paper aims to provide information about the new media routes currently available to charities, and what experiences charities have had raising money this way, to help charities in developing their fundraising strategies. The most widely used of these new media formats is the Internet, which has massive scope and potential for fundraisers. This briefing paper covers the full range of methods available to charities, from online donations, to ‘red button’ voting through digital television and making donations through ATMs. CAF has exhaustively researched the potential for new media fundraising over the last eighteen months, and this briefing paper is the culmination of our work. In section three, information about the methods available, with figures about donations generated through these methods are presented in detail. Section four presents the findings of interviews with charities conducted by CAF about the successes that they had found using new media methods, and the income that they had received through them. The analysis of this data allows CAF to report the average percentage of their total fundraised income that charities generate through new media fundraising. A discussion of the findings, with policy recommendations is presented in section five.1, reference from Random House Unabridged Dictionary, accessed on 22/11/07.
  7. 7. 3 Innovations: charities’ options and experiences6 3.1 Online fundraising 3.1.1 Overall online giving levels Although most sources agree that donors are increasingly turning to online donations, there is no definitive figure for the value of online giving in the UK. Instead, it is prudent to examine recent appeals in the UK and US and the general situation in the US to gain a picture of developments in the UK. The 2004 Asian Tsunami appeal is a key example of the popularity of online donations 2. Although there were roughly twice as many phone donations as online donations (this was also the case in the Niger appeal), during the Asia quake appeal, the DEC took an equal amount of money through phone and online donations. Indeed, in the Virtual Promise Survey 2006, 40% of charities agreed that the Internet had grown as a source of income for them over the previous 12 months. The larger the charity, the greater the number that said this 3. In 2005, an analysis of online donations processed by CAF showed huge growth in donation levels. Between 2003 and 2004, CAF processed online donations that grew from £3.6m to £6.8m; CAF’s site (regular giving) saw a 62% growth in donations, and the (credit and debit card giving) saw a 109% growth 4. In the USA, online giving has been monitored by The Chronicle of Philanthropy’s annual surveys since 1999. The latest survey reported a 37% rise in online gifts in 2006 5. It is likely that growth in online giving in the US will be mirrored in the UK. One defining factor in the growth of online giving is access to the Internet, along with the security of donating online. In the USA, it is thought that 69% of the population have household Internet access 6, the UK figure is slightly lower at 63% which is markedly above the EU average of 52%, but still far behind the highest rate in the EU which is seen in the Netherlands at 80% 7. As Internet access increases so too does the ease with which people can make online donations. Broadband penetration is also key to the growth of online donations. Again, the UK is above the EU average of 32% of households at 44% (although this 2 Third Sector, 09/11/05, p7 3 nfpSynergy, ‘Virtual Promise Survey 2006’, 4 ‘Online giving is on the up’, CAF News Centre, 23/02/05,, accessed on 11/10/05 5 6 CIA World Factbook,, accessed 20/12/07 7, 2006 data compiled by Eurostat, accessed on 10/01/08
  8. 8. has been reported as as high as 84% of those households with Internet access 8). The Netherlands again leads at 66% of households with 7 broadband. 3.1.2 Charity websites Increasing numbers of charities have their own website, and they vary in scope and complexity. A detailed study into the fundraising tools available on a sample of websites is reported in Section 4.2. Online giving is a flexible tool for donors, as it allows them to give at a time convenient to them. Charities can accept donations 24/7 which allows donors to be more spontaneous and to research and plan their giving. For instance over the Christmas period in 2007, various charities reported significantly more online donations than in 2006, with the Salvation Army reporting 191% more money and Cancer Research UK reporting 38% more donations on Christmas day and 25% more donations on Boxing Day than in 2006 9. Increasing numbers of people are visiting charity websites to learn more about the charity and its cause, and to donate. nfpSynergy’s regular Charity Awareness Monitor has found that the number of people visiting charity websites has almost doubled from 2002 to 2007, and has grown from 23% to 30% in the six months to October 2007 alone 10. It is still the minority of charities that are able to accept credit card donations online. A survey by CAF in 2001 found that of those charities with a website, only 29% had a facility for online card donations 11 although this has subsequently grown. The Charity Finance voluntary sector IT survey 2007 found that of charities with a website: 33% were now able to accept online donations, 24% could accept shopping payments, 16% offered fundraising functionality and 11% offered membership subscriptions 12. But even when a credit card donation facility is available, the website needs to be interesting in order to capture the donor, and preferably be interactive in some way. The annual Virtual Promise Survey found that it is predominantly the largest charities with an income of over £10m that have a donation facility on their website (89%), but overall around 50% of charities have this facility. An additional 12% of charities plan to get this facility on their website 13.8, 2007 data from ONS, accessed on 10/01/089 Charity News Alert survey of the top ten fundraising charities, reported in ‘Charity web visitors up a third in last 6 months, doubled in last 5 years’, press release dated 12/12/07 from Late2007CharityWebHike.pdf, accessed on 11/01/0811 ‘Charities failing to net from the web’, Nicola Hill, 22/11/01,,8150,603336,00.html, accessed on 11/10/0512 nfpSynergy, ‘Virtual Promise Survey 2006’,
  9. 9. A research survey by CAF in February 2007 found that there is room in8 the sector for a new online donation website for donors to make all their donations through. One third of the sample said that they would use a new online donation service, and of these 29% said that they would be prepared to donate more than they currently do. The average amount that these people said that they would be prepared to give, in addition to their current donations was £50 per month. 3.1.3 Online charity shops The expansion of charity shops from the high street to the Internet is underway. Charities began by making their merchandise available online as well as in addition to in shops, selling Christmas cards and other gifts. However, this has grown to include dedicated websites. For example, Oxfam has launched their first online charity shop with an initial 50,000 items available. In addition to the traditional Fair Trade goods and gift ranges popular on charity websites, the Oxfam shop stocks donated items offering the chance to purchase one-off and re-used items. Oxfam hopes the online shop will generate £2m annually 14. eBay is one of the most significant recent developments for charities selling goods and merchandise. eBay for Charity has had a significant impact on charity retailing, with over £5m donated to charities in two years 15. Following initial fears that income from donated goods would drop as items previously likely to have been given to a charity shop were sold on eBay, charities themselves decided to get involved. In November 2005 the new eBay for charity service was launched, which enabled charities to benefit through community selling and direct selling. From March 2008, eBay sellers will be able to make their donations directly from their eBay account, rather than through the MissionFish site 16. Community selling allows any eBay seller to donate a proportion of the sale proceeds to a nominated charity. To be eligible for donations, a charity needs to have registered with MissionFish who administer the scheme. Gift Aid can be claimed on these donations 17. To date, almost 14 15, accessed on 24/01/08 16, accessed on 24/01/08 17 eBay guidance
  10. 10. 2,000 charities have signed up to eBay for charity to be eligible to receive donations and in 2006/07 they received just over £558,000 18. 9 Direct selling allows a charity to sell merchandise or donated items through the usual eBay auctions with items being distinguishable by a blue and yellow ribbon. In 2006/07 this method of selling raised almost £1,692,000 for charities 19 and further incentives for the scheme included eBay providing donations to match final value fees and eligibility for a discounted rate on Paypal 20. Several charities have been extremely successful in setting up systems to allow suitable donations of goods in their shops or through collections to be sold via eBay instead. In particular Oxfam raised £300,000 through sales of donated goods in eBay and Abe Books in 2006/07 21. Sense is the UK’s largest organisation working specifically for deafblind people, or people with associated disabilities. Sense has a successful eBay strategy, with a dedicated team that centrally organises the online sales, with money from sales being credited back to the individual shop which received the donation. Sense has created niche eBay shops to auction off clothing and antiques. This tactic has allowed them to realise significant prices for high value donations, as people are more likely to bid for a high value item online than visit charity shops to find the item that they want. However, the success that Sense has had using eBay is not limited to high value items, as they have found that selling on eBay generates a higher price than in charity shops, with the average price of clothing at £10 and antiques at £20 22. 3.1.4 Online sponsorship Online sponsorship is an adaptation of the traditional face-to-face sponsorship fundraising method. Online sponsorship providers, such as Bmycharity and, allow charities and individuals to set up an online fundraising page with details of the sponsored event, which enables online credit card donations to be made. The sites process the donations, reclaim Gift Aid where appropriate, and transfer the funds to the recipient charities. Charges are made for these services in the form of monthly fees and/ or a cost per donation handled. These sites have become very successful, particularly for large-scale events such as the London Marathon and the Race for Life, and have attracted a new range of donors. has been used to raise18 Figure obtained direct from Mission Fish19 Figure obtained direct from Mission Fish20 Figures obtained direct from Sense, 2007
  11. 11. sponsorship for the London Marathon since 2001, and its popularity10 among donors has grown markedly since then. In 2004, more than one in seven charity runners used, raising £3.4m 23, and in 2006 the site accounted for nearly 30% of the £41.5m raised by the London Marathon, up £5m from the year before. In 2007 over £11m had been raised on the site prior to the race 24. Online sponsorship is becoming increasingly prevalent and many large charities offer the facility through their websites. Indeed, eight of the top ten fundraising charities listed in Charity Trends 2007 feature links to a sponsorship website. In 2006, collected £73m for approximately 2,000 charities and almost a third of this money was given by new donors who say they would not normally have contributed 25. In fact, since their launch in 2001 has facilitated donations of over £150m for over 3,000 member charities 26. BMyCharity, which was set up in October 2000, reports having helped half a million donors give over £15m since then 27. 3.1.5 Online communities The rapid expansion of online communities is also opening up new fundraising approaches. As well as offering a good opportunity to increase awareness of charities and their work, online communities are also able to provide a ‘virtual’ donor pool. MySpace is the latest social networking site to promote charitable activities. In November 2007, it launched the UK version of Impact, which allows charities to create and customise a web page and post videos and other resources to promote their work and fundraise 28. Facebook allows users to promote events and their own fundraising, and they can link their page to so that friends can donate to their cause/s online. This makes it incredibly easy to fundraise from friends and family 29. It is particularly interesting to note that online community websites are beginning to link together, fostering a greater cross-over of users between sites. Second Life, the virtual world used globally now also has fundraising possibilities. Save the Children UK was the first to offer users the chance to purchase a virtual gift, in this case a yak, with each sale raising 23 24, accessed on 08/01/08 25 26 27 28 29 accessed on 20/12/07
  12. 12. $1000 Linden (~ £1.77) for the charity as well as highlighting the plight of Tibetan children 30. 11 However, a website called My Charity Page is due to be the next online community, and is designed specifically for members of the public to fundraise through. It was due to launch at the end of January 2008 but is not live yet. My Charity Page will offer automatic Gift Aid reclamation, text donations, online shopping commission, charity profile pages and personalised URLs with blogs, photos, videos and personal messages. My Charity Page is anticipating £20m in credit card donations and £1.2m in texts in its first 12 months of operation 31. 3.1.6 Search engines It is also possible to donate money to charity through search engines such as Users can register and specify a charity that they want to benefit from their searches, or leave the charity to benefit as unspecified. Charities receive a proportion of Everyclick’s advertising revenue according to the number of searches made by individuals on their behalf 32. As of January 2008, over £377,000 had been raised by nearly 87,000 people in this way since 2004 33. 3.1.7 Video-sharing sites Charities are increasingly feeling a need to create an online presence, for campaigning purposes as well as fundraising. Beatbullying is the latest charity to raise awareness through the YouTube video-sharing site, by partnering with its owner Google to create a dedicated YouTube channel which has had over 400,000 hits 34. YouTube has a very significant awareness and fundraising potential for charities, as in July 2006, over 100m videos were being watched every day, and there were around 500,000 user accounts 35. Another example in 2007 is Male Cancer Awareness who posted their campaign videos of their humourous30, accessed on 10/01/0832 ‘ Thirteen months in the year for charities’, 14/06/06,, accessed on 24/07/06, and www.everyclick.com33 accessed on 15/01/0834 http://www/, accessed on 24/01/0835, accessed on 23/01/08
  13. 13. ‘Mr Testicles’ character participating in sporting activites like skiing on12 YouTube, to raise awareness for their campaign. 3.1.8 Targeted giving Online giving is not just for the general public. With growing interest in Ultra High Net Worth Individuals (UHNWIs) and philanthropy, ways to fundraise from these people are developing. The Reed Foundation has launched a website catering specifically for wealthy philanthropists aiming to donate between £100,000 and £10m. The project, named ‘The Big Give’ aims to allow high level donors to search for appropriate projects to support. Shortly after launch more than 250 projects were available 36. Looking further afield, in the US there are several more established sites that UHNWIs can use to give to projects. For instance, Global Giving 37 has a range of projects in different parts of the world, and donors of all sizes can search for a project that they want to support and can then donate by credit card online, which is tax deductable. The added incentive is that donors can see the impact of their donation when project leaders post progress reports on the site. For UHNWIs, therefore, although the more traditional philanthropic avenues are still open, such as creating a foundation or trust, online giving to existing projects is now a viable and increasingly popular alternative or add-on. 3.1.9 Spontaneous giving This section focuses on the donation methods used during emergency appeals, as an example of how a wide variety of fundraising methods, especially new media methods, can be successfully used by a large number of donors to give to charity in a compacted period, when time is of the essence. 36 37
  14. 14. The best example of spontaneous online giving on a grand scale is the 2004 Asian tsunami. The donations made as a result of the tsunami 13 appeal are a key example of the trend towards spontaneous, rapid and highly generous giving in contrast with the more routine planned regular giving. The South-East Asian tsunami occurred on Boxing Day 2004, and in the UK the Disasters Emergency Committee (DEC) launched an appeal for donations to help the affected region on 28 December 2004. Public support was huge, with around four-fifths of adults (aged 15+) donating to the appeal 38. After the appeal had closed, the DEC reviewed the donations that they had received and the methods by which they were given and published their analysis on their website. In total £400m had been received, £350m directly to the DEC and a further £50m to agencies. A high volume of donations was received from the very beginning of the appeal, and in the first 24 hours, £5m was raised by phone from 138,000 people, and £300,000 was donated online 39. Very notably, on New Year’s Day, the DEC broke the online fundraising world record when it took £10m in a day. Clearly, for the tsunami appeal the Internet was a crucial fundraising tool, enabling high volumes of donors to give in a short space of time. CAF’s research into donor behaviour during the tsunami appeal found that the internet was a particularly important fundraising method, with 61% of the online donors saying that this was the first time that they had donated online. These donors were also most likely to be aged 25-44 and to have donated £11-£25 40. These figures echo CAF’s research into tsunami giving behaviours, which found that while only 1% of the sample had made a text donation, they all said that it was the first time that they had used this method 41. This indicates that it is a fundraising method which has the potential to grow, if the sector can consolidate its fundraising possibilities. There is further discussion on text donations in section 3.2. In the US, individual charities reported that a large proportion of the tsunami donations that they received were through online donations. Save The Children’s online donations were 31% of their tsunami income; CARE USA’s was 38%; and Oxfam America’s was 80%. In the US, $350m was donated online, 80% of which was given in the first seven days after the tsunami. This eclipsed 9/11’s $211m, and indicates that as in the UK, US donors wanted to make a quick spontaneous response. Indeed,38 CAF Research, January 200539, 11/11/05, accessed on 23/06/0540 CAF Research, January 200541 CAF Research, January 2005
  15. 15. over half of the online US donors indicated that they did not want to14 be contacted by the relief agencies, and so did not want continuing involvement with the charities or the appeal 42. 3.1.10 US comparisons Estimates of the amount donated online in the US vary, but all the figures indicate that the amount of money being donated online is increasing. Most estimates say that during 2004, $2bn was donated online 43, although one estimate puts it as high as $3bn 44; $4.5bn has also been quoted for 2005 45. Either way, online donations account for no more than 2% of total donations in the US. Giving USA 2007 references a report by Target Analysis Group, which found that online donors tend to be younger and have a higher income than offline donors, and tend to give more than other donors. The study stated that the median 46 online gift was $57 compared with $33 for offline gifts 47. In the US, online giving has been monitored by The Chronicle of Philanthropy’s annual surveys since 1999. The latest survey reported a 37% rise in online gifts in 2006 48. The 2004 Asian tsunami and other natural disasters have boosted online giving levels in the US. The Pew Internet and American Life project found that 18% of their respondents had made an online donation and half of these had given online following hurricanes Katrina and Rita 49. The proportion of donations received online for an appeal can also be high. The Chronicle of Philanthropy’s sixth annual survey of online fundraising showed that Doctors without Borders and Oxfam America both received 45% of their tsunami donations online 50. Mirroring the UK experience, the majority of charities experienced a decrease in their donations after the tsunami, and 95% said that this was directly due to disaster relief donations 51. In the US, online donors are able to send donations to charity websites, by using the Google Checkout facility, with no transaction fee for the charity. The donors click on a ‘donate’ button on the charity’s website, which takes them to the Google Checkout site where they enter their donation and payment information 52. Google Checkout is offering this 42 Nonprofit Technology Enterprise Network, ‘Online fundraising for tsunami relief heralds the new e-stakeholder, Michael Stein, July 2005, www.nten. 43 Giving USA 2005, p66 and ‘A decade of online fundraising’, Stein M & Kenyon J,, Winter 2004, p66 44 ‘US online giving surpasses $3 billion in 2004’,, 16/06/05 45 ‘The young and the generous: a study of $100 million in online giving to 23,000 charities’, referenced in Giving USA 2007, p61 46 The median is the middle number in a sequence of numbers, that is, 50% of cases fall above as well as below it. 47 Target Analysis, 2006 donorCentrics Internet Giving Benchmarking Analysis,, referenced in Giving USA 2006: the annual report on philanthropy for the year 2006, p61 48 49 ‘More people are giving online, poll shows’, 08/12/05, Chronicle of Philanthropy 50 ‘Relief charities test ways to keep tsunami donors’, Nicole Wallace, premium/..., accessed on 07/06/06 51 ‘Final report: fundraising in light of recent disasters’,, accessed on 08/08/06 52, accessed on 15/01/08
  16. 16. facility free of charge to US non-profit organisations until the end of 2008 53, after which they will charge 2% and $0.20 per transaction 54. 15 The site’s support for the Southern Californian wildfire relief efforts in the Autumn of 2007 is an example of how the site can work for charities: a landing page was created, which enabled donations directly to either The Red Cross or The Salvation Army 55. In the UK the ‘donate’ buttons are not yet available on Google Checkout, but donations can be made through a standard Checkout button to registered charities 56. Transaction processing fees are also applicable in the UK, at the standard rate of 1.5% plus £0.15 per transaction 57, so UK charities are not currently receiving the same benefits of this scheme as US charities. 3.1.11 Risks and concerns The use of online fundraising is not entirely without its potential dangers, and as with the Internet as a whole, it is not comprehensively regulated or policed. Indeed, Colin Lloyd, chairman of the Fundraising Standards Board has outlined the view that it is impossible to regulate online fundraising, admitting that during the two years taken to develop a code of practice, the Internet could change rapidly enough to render the code irrelevant 58. One issue charities face is that social networking websites may pose a threat to their brands. Individuals are able to create pages about a charity in which the charity described has no control over brand, message or content. Arguably it is becoming increasingly important for charities to create official presences on the key online community websites in order to maintain their online brand 59. As with any financial online transaction, credit card details need to be protected and stored securely. Perhaps one of the biggest online threats faced by charities is the problem of fraud. Since the tsunami appeal, there have been warnings that it is possible for fraudsters to divert electronic donations or capture donors’ bank account details 60. During the appeal following the 9/11 World Trade Center disaster, there was an incident of ‘pharming’ of a US appeal website. Hackers hijacked the charity website53 Provided directly from Google Checkout54 Provided directly from Google Checkout56 Provided directly from Google Checkout57 Third Sector (online), ‘Online regulation is impossible, admits Lloyd’ 10/07/07, accessed on 10/08/07, Fundraising/Article/670043/Online-regulation-impossible-admits-Lloyd/59 Third Sector (online), ‘IT intelligence: Networking websites’ 08/08/07, accessed on 10/08/07, Article/729959/intelligence-Networking-websites/60 ‘Net benefits’, 07/01/05,,,1384676,00.html, accessed on 16/05/06
  17. 17. domain and redirected donors to a similar looking site to make their16 donations, which then went straight to the fraudsters 61. Another danger concerns fraudsters hacking into charity websites to steal donors’ bank details. This happened in the UK to Aid to the Church in Need in November 2005. The details of 3,000 donors who had made purchases from the online shop were accessed from a password- protected and encrypted website 62. In the Charity Finance voluntary sector IT survey 2006, 35% of charities identified external hackers as a problem, compared with just 10% in the 2004 survey 63. A new trend in online fraud affecting charities has recently been documented; fraudsters attempting to verify stolen credit card numbers have used the cards to pay a small amount of money to a charity. This allows thieves to verify that the stolen card is still active in a way unlikely to trigger alarm bells with bank monitoring systems 64. However, even this type of fraud can potentially be turned to a charity’s benefit. For example, when World Emergency Relief detected suspicious donations being made it alerted cardholders, who were able to cancel their cards before they were heavily abused by the fraudsters. Although World Emergency Relief offered to reimburse all donations, they were actually sent further money from cardholders by way of thanks 65. To retain donor confidence in online donations, charities must continue to make their websites as secure as possible, and regularly check that all is well. 3.1.12 Scope for increasing for online donations Table 1 shows that Internet access levels in the US, UK and EU are above the global average of 15%, at 50% of the population or more (although other estimates put global Internet usage at as high as 19% in November 2007) 66. Put simply, as Internet access expands in these countries, the incidence of online giving is likely to increase, thus pushing the proportion of giving made online up, complementing and perhaps overtaking the more traditional methods. 61 Third Sector (online), ‘Opinion: charity fraud – fraud with danger’, 05/04/06, accessed on 24/07/06, cfm?ID=18294 62 As above 63 Charity Finance voluntary sector IT survey 2006, p12 64 Third Sector (online), ‘Fraudsters prefer to donate by credit card’, 10/07/07, accessed on 14/08/07, Article/670548/Fraudsters-prefer-donate-credit-card/ 65 Third Sector (online), ‘Charity blows whistle on credit card fraud spree’, 18/12/06, accessed on 14/08/07, Finance/Article/620962/charity-blows-whistle-credit-card-fraud-spree 66
  18. 18. Table 1: Global Internet access rates 17 Country % of population with Year Internet access US 69 2006 UK * 63 2006 EU * 52 2006 World 15 2005 Source: CIA World Factbook, 2005, 2006 and 2007 data,, accessed on 20/12/07. * ONS, compiled by Eurostat 3.2 Mobile phones and text donations In the UK in 2007, an unprecedented 1bn text messages were sent each week, which is equivalent to 5,000 per second 67 or the total number of texts sent in 1999 68. In December 2007, 6.1 billion texts were sent 69, and 290 million texts were sent on New Year’s Eve, which is 30% more than New Year’s Eve in 2006 70. The public is becoming increasingly used to using the mobile telephone to interact with organisations and appeals. Some charities raise money from text donations to appeals. For example, Shelter (Scotland) and The British Red Cross are both asking for text donations in 2008, using PayPal. Many people are familiar with PayPal as a way to make online purchases from a computer, but it has now been adapted to allow charitable donations (once registered with PayPal). More and more television programmes encourage text votes for competitions, such as the BBC’s ‘How do you solve a problem like Maria?’ and ‘I’d do anything’ and ITV’s ‘I’m a celebrity: get me out of here!’ where people can vote for who they would like to see continue in the competition. A percentage of the cost of the text or call is then usually donated to charity on behalf of the viewer. The BBC’s phone donations are allocated either to their Fame Academy Bursary Trust, or to a specific appeal, however there is no data available on the money raised by the BBC over the last two years. In January 2008 though, the BBC announced that only calls and texts for votes or competitions directly linked to appeals such as Children In Need and Comic Relief will be allowed to raise money. Programmes such as ‘How do you solve a problem like Maria’ and ‘Strictly Come Dancing’ will not67,,30400-1304266,00.html, accessed on 14/02/0868, accessed on 14/02/0870,,30400-1304266,00.html, accessed on 14/02/08
  19. 19. be allowed to add a surcharge for appeals. The BBC has introduced the18 policy to ensure that audiences have more clarity on the cost of calls and texts. Children In Need has estimated that they will miss out on £1.8m per year 71. In 2007, the calls to series seven of ITV’s ‘I’m a celebrity: get me out of here!’ cost 50p, and of that, 15p went to charity, with each of the 12 charities (nominated by the participating celebrities) receiving an equal share 72. CAF distribution data reveals that in 2007, £244,955 was raised for 13 charities, with £18,842 allocated to each charity. This is a drop of 20% from 2006 when just over £306,000 was raised for 13 charities, with nearly £43,000 donated to Whizz-Kidz, the winner’s nominated charity. (Prior to 2007, donations were allocated according to the number of calls made and therefore the order of departure of celebrities). Through relatively little effort therefore, a small selection of charities are able to open up a new income stream through the television route. A study by Nestlé, found that mobile phones are particularly crucial to the lives of the 11-21 age group 73. 97% of females and 92% of males in the survey sample had access to a mobile phone, and they are particularly comfortable with texting as a method of communication, which includes ‘getting information, arranging meetings, sending thanks, and also relationship activities such as chatting up or flirting, and arranging a first date’ 74. It is this younger demographic that is very likely to engage with text donations. Indeed, research conducted by CAF in January 2007 revealed that it was the younger people that were most likely to express an interest in making text donations to charity. 58% of people aged 18-24 stated that they were interested in text donations, compared with the average of 22%. Interest levels decreased with age, down to 7% for people aged 55-64 75. Fundraisers are becoming increasingly aware of the potential of mobile phones as a method of donation. The process is that the donor simply 71 72 73 ‘Joined-up texting: the role of mobile phones in young people’s lives’, Nestlé Social Research Programme, 2005 74 ‘Joined-up texting: the role of mobile phones in young people’s lives’, Nestlé Social Research Programme, 2005, p2 75 CAF Research, January 2007, phone interviews conducted in January 2007, unpublished
  20. 20. sends a text to the charity, and is billed for a fixed value. The phone operator facilitating the text donations then passes the donation to the 19 selected charity for a fixed fee. William Hoyle, Chief Executive of Charity Technology Trust has pointed out that if all UK mobile phone users donated £1.50 by text, the sector would see its income rise by £810m, or £1.036bn if all donations were Gift Aided 76. Currently, 14% of charities report using mobile phones (including SMS text messages) as a communication tool, although these are mainly the larger charities. However 30% of charities say that they are looking at this as a method of communication, and again it is the larger charities that are considering this 77. The interest of smaller charities in using this method has increased by ten percentage points in the last year though, with larger charities not increasing their use at all and medium charities actually decreasing. The 2004 Asian tsunami is an example of an appeal that has raised money in this way. In the UK, £1m was raised from text donations to the DEC from 650,000 text messages, and a further £3.3m was raised by Radio Aid in January 2005. People donated £1.50 to the DEC with each text, and because the UK Government waived its normal charges, 100% of each donation went to the appeal. Text messaging was also popular in other countries, and comparable figures are available for tsunami fundraising. In France, each text was worth €1 and over €3m were raised; in Greece €1 was donated, with 58% of donors sending one text and 6% sending more than six; in Italy 26.62m texts were sent at €1 each; in the US, $5 was the donation to CARE USA; in Australia donors could text either AUS$2, AUS$5 or AUS$10; and in Brunei text donations totalled Br$60,463 78. However, text donations are not the only medium that fundraisers will be able to target mobile phone users for in the future. Mobile technology is constantly developing, with the iPhone the most recent product, and web access by phone is increasingly sophisticated. Japan is at the leading edge of mobile payment technology, with over seven million people owning mobile phones with the technology to make ‘contactless’ payments (ie. no cash/card payment is made), and over 2.5 million merchants offering the facility. Their increasing reliance on this method of payment is likely to be replicated in the US and EU over the next decade 79. The UK is now starting to investigate the possibilities of cashless payment, with the O2 wallet launched for trial in November 2007. The O2wallet is76 Charity Times, IT Supplement, September/October 2005, pp34-3577 nfpSynergy, ‘Virtual Promise Survey 2006’,
  21. 21. a mobile phone that utilises Near Field Communication (a way to use one20 device to perform multiple functions on the move) to act as a credit card and Oyster card 80, which can pay for goods under £10 81. It is currently being trialled for six months, and if it is successful, will be launched at the end of 2008 82. The options for making donations by mobile phone are therefore likely to increase over the next few years. 3.2.1 The scope for increasing potential for text donations Similar to Internet giving, increasing the amount of money donated by text is partially dependant upon the percentage of the population that has a mobile phone. Globally, one-third of the population has a mobile phone 83. In the 219 countries and regions where data on the penetration of mobile phones is available, 51% of countries have a penetration rate of less than 50%. 84% have a rate of above 0% and up to 100%, but interestingly, 16% have a penetration rate of over 100%, which means that in these countries there are more mobile phones than people. The highest penetration rate is in Trinidad and Tobago at 157% of the population (although this does not mean that every single person has a mobile phone), and the lowest is Burma at 0.5%. The UK is in the top 16% of countries, in 15th place with a rate of 114% 84. Figures for the UK show from another source 1,042 mobile subscribers per 1,000 people 85. Table 2 shows the penetration of mobile phone ownership globally. Table 2: Global mobile phone ownership rates Country Penetration of mobile Year phones % UK 114 2006 EU 95 2005 Japan 80 2006 US 77 2006 World 33 2005 Source: CIA World Factbook, 2005, 2006 and 2007 data,, accessed on 20/12/07. 80 A top-up card for travel on London transport, run by Transport for London 81,39029453,49294493,00.htm 82 83 CIA World Factbook, 2007,, accessed on 18/01/08 84 CIA World Factbook, 2007,, accessed on 18/01/08 85
  22. 22. A payment service similar to PayPal has been launched in the UK by the Norwegian telecoms company LUUP. It allows anyone aged over 14 to 21 pay for goods and services, including charitable donations by SMS, WAP, online or post. Amnesty International has already registered to receive donations and will be charged a transaction fee of 2.5% plus 18p per text donation: less than mobile phone operators currently charge 86. This new vehicle for donors to make text donations through should diminish the concerns of donors and charities about the percentage of the donation that reaches the charity. There is therefore renewed hope for the volume of income that could be raised through text donations. Finally, in March 2008 the government confirmed that text donations are not liable for VAT, which means that text donations must now be treated in the same way as other types of charitable giving by mobile phone operators. This development should also help reduce donor and charity concerns about how much of each donations is received by the charity 87. 3.2.2 Barriers to the growth of text donations Sector and technology specialists are predicting growth in donations via text and the Internet. However, one current restriction on text messaging is that donations are fixed at £1.50, which is restrictive for the donor and then the mobile operator takes a cut of this. Charities are operating within a commercial framework for electronic communications and transactions. Charities have to lobby for favourable rates, but still the costs incurred may prevent them from continuing. In any case, these costs are widely reported in the press and are often cited as reasons for donors not to give using these methods. For instance, The Daily Telegraph reported that after tax is deducted and the networks take their fee, only about two-thirds of the donation goes to the charity 88. Fundraisers may be worried that the public will be put off by this donation method. The Institute of Fundraising had been campaigning for mobile phone operators to reduce their charges for text donations, and sought ‘some long-term discounted charging structure that reflects the needs of their customers and the charities they are supporting’ 89. However, they had to cease lobbying in early 2007 due to a lack of response from the operators 90. claim that with its service, £2.05 of a £3 (two text) donation reaches the charity, which equates to 68% of the donation.86, accessed on 07/03/0887, accessed on 07/03/0888 The Daily Telegraph, 25/04/0589 Lindsay Boswell, Chief Executive, Institute of Fundraising,, accessed on 20/12/07.
  23. 23. In addition, a major barrier to the growth of text donations is that it is22 difficult for charities to reclaim Gift Aid on these donations, which again can make it a less attractive fundraising method to pursue for charities and for donors to use. Collecting Gift Aid declarations by the paper method would be a time-consuming process for charities and would be disproportionately expensive for the value of donations received. In addition, the number of donors willing to fill out a paper declaration would probably be fairly low. However, it is possible for charities to arrange for an electronic Gift Aid declaration to be sent by mobile internet, thus automating the process. In 2006, Macmillan Cancer Support was the first charity that was able to send text donors a WAP message inviting them to go online on their mobile phone to complete a Macmillan-branded Gift Aid form. It was sent directly after the donation was received, which it was hoped would improve completion rates over and above asking the donor to go to their website from a PC 91. However, the majority of charities do not collect Gift Aid on text donations. Indeed, Justgiving states that they do not currently reclaim Gift Aid, because ‘the effort and expense of collecting this additional data is not justified by the volume and take-up of Gift Aid on sms currently’ 92. For charities unable to set up an automated system like this, or who have decided not to promote text donations, potential donors can also be encouraged to text charities simply to request information. This interaction can assist with growing the relationship between potential donor and charity. Perhaps the final barrier to text donation growth, is that donors may have chosen this method specifically because they do not want regular contact with the charity. Texting is a fairly anonymous donation method, which makes it difficult to encourage future donations or a move to planned giving. Conversely, donors may be avoiding text donations because they would rather find a route that allows them to build up more of a relationship with a charity. 3.3 Digital television The spread of digital television has now reached two in three homes in the UK 93. Television has many applications for charities; it can be used simply to broadcast information or to televise an appeal but the digital facilities have opened up new fundraising avenues. 91, accessed on 14/02/08 92, accessed on 07/03/08 93, 2005/06 data, accessed on 10/01/08
  24. 24. 3.3.1 Dedicated television channels 23 Solent TV was the UK’s first not-for-profit television channel, broadcasting to the Isle of Wight and at its peak attracted 70,000 viewers before closing down in 2007 94. The Community Channel is perhaps the best known dedicated third sector television channel. It was launched in 2000 and since then has extended broadcast times to offer a 24 hour service to 1.2 million viewers a month. The Community Channel is currently the only channel completely dedicated to highlighting issues from both local and international communities as well as the voluntary and charitable sectors. It also provides a fundraising mechanism through ‘red button’ technology 95. A new channel, NGO TV, has received its Ofcom licence and plans to begin broadcasting in the middle of 2008 96. The channel is due to be launched in 2008 by Shahbaz Sarwar in association with Sky. The aim of the channel will be to work with UK charities to produce and broadcast documentaries highlighting their work 97. 3.3.2 Digital television applications Digital television is one of the newer fundraising methods, allowing charities to communicate rich information to donors and potential donors as well as raise money. The Virtual Promise Survey 2006 shows that a very small number of charities are already using digital TV to communicate (5%), and for the first year, medium and small charities are using this fundraising method. An additional 11% of charities are also considering using digital TV, and this includes all sizes of charities 98. ‘Red button’ technology also has a part to play. Many channels offer an interactive television service that may be accessed by pressing the red button on a digital television remote control. For instance, during programmes on the Community Channel a message appears telling viewers “Press red now to donate”, pressing the button accesses a list of featured charities that the viewer can select from. The Community Channel also shows fundraising adverts for charities, and pushing the button during an advert will allow donations to be made. Most recently, in November 2007, the BBC’s Children In Need fundraising night live on BBC1 allowed a red button ‘donate now’ facility.94, accessed on 07/01/0897 nfpSynergy, ‘Virtual Promise Survey 2006’,
  25. 25. 3.4 Coinstar machines24 Coinstar machines can be found in many UK supermarkets allowing the user to deposit mixed amounts of change in return for a voucher to use in-store. The machines also offer the option of donating the change to charity through the ‘Coins that Count’ donation programme. After inserting the coins into the machine, a charity can be selected from the list of options, a receipt is then printed which incorporates a Gift Aid declaration for the donor to fill out and post to their nominated charity 99. A processing fee of 7.9% is applied when coins are exchanged for cash vouchers; the figure is slightly lower for charitable donations, at 7.5%. The current charities available to choose from in the UK are: British Red Cross, British Heart Foundation, Cancer Research UK, The Children’s Society, UNICEF, WWF and Whizz-kidz 100. In 2006 approximately £130,000 was donated to charities through the ‘Coins that Count’ programme 101. 3.5 ATMs In November 2005, a new donation method which enabled giving through some ATMs (cash machines) began operating. HSBC and First Direct customers were the first to be able to make donations to charity from HSBC cash machines. This follows research that found that ‘almost one in five people say they would donate more if they could through ATMs’ 102. In June 2006, six new charities were added to the list: WWF, Cancer Research UK, Childline, Help the Aged, the British Heart Foundation and Mencap 103. Following negotiations with HMRC, Gift Aid may be reclaimed directly by the charity if the donor confirms eligibility by pressing a button during the ATM transaction. Table 3 shows the international ATM giving facilitated by HSBC 104. 99, accessed 17/08/07 100, accessed 17/08/07 101 Provided directly from Coinstar 102 HSBC bank introduces donation by cash machine’, Howard Lake, 06/11/05,, accessed on 11/11/05 103 Cash machines offer donation option’, 19/06/06,, accessed on 20/07/06 104 accessed on 09/08/2007
  26. 26. Table 3: Donations made through HSBC ATMs 25 Country Facility provided Amount Year donated Mexico ATM and USD $1,700,000 2005 Internet banking donations Hong Kong ATM, ‘phone USD $600,000 2005 banking and Internet banking donations UK 105 ATM and £224,359 November 2005 Internet banking – August 2007 donations The potential of this donation method, should it be extended to other banks’ machines, is high. In 2006 there were 35.1m regular users of cash machines and 2.75 bn ATM withdrawals in the UK 106. Opening up this donor market could lead to great increases in ATM donations. 3.6 Viral emails Viral emails can also be used as a way of promoting a fundraising campaign to new donors. By sending out an email, usually with some sort of interactive element, such as a video clip embedded in it, the idea is that the donors will forward the email on to their friends, and so on. By producing a snowball effect of increasing numbers of people having seen the email, it is hoped that these people will enter the website and make a donation. There is of course the risk with this method that viral emails could be treated as SPAM by email providers and users. However, automated emails that go to the same list repeatedly can be set up to suppress addresses that have already responded to the campaign 107.105 Figure obtained direct from HSBC106 ‘Innovations in Online Direct Response Fundraising Drive Results’, 31/03/06,, accessed on 24/07/06
  27. 27. 4 CAF interviews with charities 4.1 Stage 1: interviews with charities26 During July 2006, CAF commissioned a small piece of qualitative research with fundraising charities to investigate their use of new media fundraising methods. The aim was to reach an approximate figure for the average percentage of voluntary income that is raised using new media, with an indication of which particular new media methods draw in more money overall, whether this is because they are more effective, more popular with donors, or used more often by charities. CAF was interested to see, in the light of sector press about the potential of online giving and SMS text donations, how far charities are using the range of ‘new media’ methods, and what success they feel they have had with them. By understanding their experiences, it is hoped that UK charity fundraisers can be guided on how best to utilise these methods to raise their charities’ voluntary donations. 28 charities took part in the research; they were a mixture of large charities from CAF’s top 100 fundraising charities as listed in Charity Trends 2006; charities that were specifically invited to take part as CAF knew them to be active in new media communication and fundraising; and charities that asked to take part after reading about the planned research in the sector press 108. Organisations that process new media donations were also contacted to ask them how much money they are processing for charities, which acted as a double-check on the main part of the research. The charities and processing agencies were interviewed by CAF, and the question areas are listed in the appendix. 4.1.1 Findings Some charities were able to provide a great deal of detail on their use of the Internet and other new media methods, and shared their plans for future projects or ways of working. Conversely, other charities did not offer any details, but simply gave a figure for the proportion of their total income that is received through new media routes online (this could be an actual figure or an estimate). Other charities were unable to provide any figure at all. At the end of the research, there were indications of the income received through the new media fundraising methods, rather than an absolute figure. The results are sufficient to act as a line in the sand for the percentage of voluntary donations from new media methods. Therefore, the figures presented here are indicative and provide a starting point for further research and analysis. 108 Stories appeared in Third Sector, on the UK Fundraising website, and on a web forum